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Sun Hung Kai slumps after arrests

By By Oswald Chen and Kahon Chan (China Daily)

08:14, March 31, 2012

Thomas (right) and Raymond Kwok, joint chairmen and managing directors of Sun Hung Kai Properties Ltd, at a company news conference in Hong Kong in this file photo. (China Daily/Edmond Tang)

Sun Hung Kai Properties Ltd, a large Hong Kong developer, lost HK$38.1 billion ($4.9 billion) of its market value as its share price tumbled on Friday following the arrest the previous day of two top company executives.

Raymond Kwok Ping-luen and Thomas Kwok Ping-kwong, chairmen and managing directors of Sun Hung Kai, were arrested by the Independent Commission Against Corruption after being suspected of bribery.

The Kwok family, which has an estimated fortune of $18.5 billion, is ranked 27th wealthiest in the world by Forbes Magazine.

Also arrested was Hong Kong's former chief secretary for administration, Rafael Hui Si-yan. Hui was detained on the suspicion of misconduct in public office. All three were released on bail late on Thursday. They avoided the press on Friday. Sun Hung Kai Properties said both Raymond and Thomas Kwok returned to the company's offices on Friday.

Sun Hung Kai's board voted unanimously to keep the Kwoks in their positions as the company's shares began to be traded again on Friday. Analysts warned that the arrests had made its prospects uncertain.

After trading was resumed on Friday, the company's shares plummeted to HK$96.5 apiece, the steepest drop they had undergone in 14 years, amounting to a 13.1 percent loss in their value. The decrease erased as much as HK$45.2 billion from the company's market value.

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